Orange County is known for sand, surf and rich Republicans. But did you know it’s also the epicenter of real estate fraud in California?

It’s true. For the third year in a row, the Legislative Analyst’s Officereported this month that Orange County law enforcement agencies investigated the most real estate fraud cases among the state’s most-populated counties in fiscal year 2011-2012.

In fiscal year 2008-09, the LAO reported that Orange County investigated the second most real estate fraud cases.

These figures come from a regular report produced by the analyst’s office about California counties that participate in something called the Real Estate Fraud Prosecution Trust Fund Program. Enacted by the Legislature in 1995, the program allows counties to charge a small fee for the filing of certain real estate documents, with the proceeds supporting the fight against real estate fraud. The fees were upped from $2 to $3 in 2009.

As part of the law, the district attorneys of participating counties are require to file an annual report with their county board of supervisors and the LAO detailing the number of real estate fraud cases filed as well as financial information about the health and condition of their trust fund.

Even if that’s so, the numbers for Orange County are still striking. In the last fiscal year, Orange County investigated 340 cases of real estate fraud. The next highest county that year was Los Angeles, with 234 cases investigated.

The year before that, Orange County investigated 414 cases, with Los Angeles again coming in second with 212.

In fiscal year 2009-10, Orange County reported investigating 309 cases of real estate fraud. The next highest county that year was San Diego (Los Angeles wasn’t listed) at 175.

In fiscal year 2008-09, Orange County investigated the second most real estate fraud cases at 154, behind San Bernardino county, which reported investigating 213.

Orange County, in other words, has been home to a lot of real estate fraud allegations. But why?

OC District Attorney Tony Rackauckas

Well, one theory is the pleasant climate.

“In my view, crooks like to live in nice weather,” says Assistant District Attorney Elizabeth Henderson, who heads the Orange County D.A.’s Major Fraud Unit.

In recent years, Henderson said, Orange County has seen “a lot of loan-mod mills” that promise distressed homeowners a loan modification but end up just making off with their money. Ironically, Henderson said, investigators have found that some people who work in these mills used to be involved with selling toxic loans before the mortgage crisis in 2008.

Prior to that meltdown, the Orange County didn’t have a lot of complaints about real estate fraud, she said. But that didn’t mean Orange County didn’t have fraud — it just had a different kind, Henderson said.

“Orange County has always been a center for mill-based fraud,” she said, referring to “boiler rooms” or call centers where workers try to sell unsuspecting consumers questionable products or services.

Henderson said O.C.’s recent spate of loan modification mills typically have targeted customers out of state. She said that’s on purpose, because it makes it harder for swindled customers to track down the mill and ask for their money back. She also said it makes prosecuting the cases much harder as well, because Orange County would have to fly in victims from across the country.

According to LAO’s most-recent report, there were 545 victims of real estate fraud in Orange County in fiscal year 2011-12 and 38 real estate fraud cases filed. That year, Orange County secured 15 convictions for real estate fraud. Cases often involve dozens of victims.

The year before, the county nabbed 12 convictions and filed 460 cases. In 2009-10, OC had 15 convictions and filed 36 cases and in 2008-09 it had 1 conviction and filed 11 cases.

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